1) Democrats got “shellacked” as bad as some people say, and worse than many people realize. But for a few exceptionally weak Tea Party candidates, Democrats would have lost their majority in the Senate as well as the House of Representatives.

2) The Democrats and Tea Partiers are both likely to misread this election. Just like 2008 (and other elections like 1992 and 1994 where the winning side overclaimed a mandate), this was a rejection of one political ideology, but not an embrace of the other. In fact, for several elections in a row, voters have rejected ideology based politics and yet our parties are both growing increasingly ideological. There is something seriously wrong here.

3) Democrats cannot count on things getting better in the next election. Unless progressives get a lot more creative in how they view politics, and chart a course that takes us beyond the intra-party partisanship of the left versus the moderates, 2012 may actually be a lot worse.

If Democrats are going to mount a turnaround in the next election, the first step is to face the facts about what happened in this election. The second step is to listen to one another. And the third step is real change in how we govern for the next two years.

The first step is to face the facts.

Voters rejected Democrats because they believed we cared more about our ideological agenda, than the voters’ agenda. The voters’ agenda has one item on it: Jobs. After passing several big spending bills that in the view of voters were too big and yet not effective Democrats spent 10 months arguing among ourselves over the details of health reform.

Rather than demonstrating that Washington can do anything right through a series of initiatives that brought benefits people can understand to solve their problems, Democrats opted for enormous “comprehensive” bills that we hope the public will eventually appreciate (once we give them all the facts). Many people, including former President Clinton, have been pointing to voters who were unclear about basic facts heading into the election. But, even if voters were unclear about the facts they were not unclear about their own intentions.

It is true that many voters believed Obama rather than Bush was responsible for the TARP financial bailout, for example, and from the point of view of progressives, it is almost comical that many voters think the health reform amounted to a government takeover. But voters were nonetheless clear in sending the message that they think government in Washington is trying to do too much, without delivering progress on the one issue they cared most about, jobs.

Whether TARP was Obama’s idea or Bush’s, voters worry about its price tag in combination with other large government expenditures. Whether health reform amounted to a national takeover or not, voters were clear that they did not want a national takeover. Progressives were right to say Republicans would paint it as a government takeover whether it was one or not.

The second step is to listen to one another.

In fact, the consistent theme from this election is that all of the component groups that made up the coalition that elected Barack Obama in a landslide just two years ago, made dire predictions about what would happen to Democrats in 2010 unless we listened to them – and all of them were right. We didn’t listen to them and all of the dire predictions came true. The economy did not come back. The base was not enthused. Key constituencies stayed home. And, independents broke strongly for Republicans. Everyone was right and everyone lost.

Economists on the left, notably Paul Krugman, warned that a too small stimulus would fail to get the economy moving. Basic Keynesian economics, which saved us from the Great Depression, teaches us that even with near zero interest rates, government expenditure can be necessary to maintain enough demand to avoid a deflationary spiral. If people do not have enough money in their pockets to buy stuff, business will not hire workers, and then people have even less money to buy stuff. We can blame the economy for the bad result, but some of our economic experts believe we did not do what we needed to do to move the economy forward. They believe the stimulus must have been larger, and they were right that the unemployment rate has been stuck in a place that contributed to our Election Night losses.

Moderates in Congress warned that independent voters were growing concerned about deficit spending and government debt. They were right. Exit polls tell us independent voters that had broken for the Democrats in the past two elections, moved as dramatically to the GOP in this election. The majority of voters believe the stimulus bill was a failure, and the public believes government spending is out of control. About half of the House moderates were defeated in the last election.

The net roots warned that progressives would stay home if the President did not back the policies of a “real Democrat.” Their job, as they saw it, was to keep Obama honest and true to progressive ideals. And if he failed to show enough “backbone” in pushing for “real reform” of the health care system, or “real reform” of the financial system, they predicted progressive voters would stay home. They were right. Democrats suffered an enthusiasm gap as young voters in particular were not only a far smaller proportion of the electorate than in 2008, but fewer voters under 30 participated than in 2006 and Democrats lost, just as the net roots had predicted.

Women have had doubts about the Democratic priorities, playbook, and tone being too masculine and detached ever since Obama wrested the nomination from Hillary Clinton. With too much head and too little heart — too little emphasis placed on the kitchen table jobs issues and a message that says “we care,” not only did independent women move dramatically from Democrats to Republicans, Democratic women didn’t show up in customary numbers for phone banks and get-out-the-vote activities. If not for the handful of states where Democratic women could vote Democratic women at the top of the ticket, particularly in California and Washington, the overall women’s vote would have moved even further away from Democrats.

Unions, environmentalists, LGBT, minorities, and other interest groups, who had to take IOUs rather than progress on their top initiatives in the first two Obama years, warned that they would have difficulty explaining to their constituents why they should turn out at the polls. They were right, they struggled to turn out their constituents, and with several important counter-examples (most notably union and Hispanic voters turning out in just large enough numbers to help Harry Reid eke out a win in Nevada) Democrats lost power and now there seems to be little reason to believe Obama will be able to deliver on these promises in the second two years. The Employee Free Choice Act, legislation to address global warming, repeal of Don’t-Ask-Don’t-Tell, comprehensive immigration reform (and even the Dream Act) are all still sitting on the list of unfulfilled promises.

The third step is real change in how we govern.

There is a lot of magical thinking going on in some Democratic circles that points to the 1995/96 Clinton comeback without understanding how it was achieved. In addition to a tremendous Republican overreach by Newt Gingrich that John Boehner (then a Gingrich lieutenant) may or may not repeat this time around, Clinton made dramatic moves back towards his centrist DLC governing philosophy. This included a clean-break denunciation of the left in the form of a State of the Union headlining phrase, “The era of big government is over” and enactment of conservative leaning policies, most notably a welfare reform bill that was reviled by the left and brought resignations of several high ranking liberal policy advisors.

It is not at all clear that this is the only, or even best, option open to Obama. An alternative strategy would be to move as far away from ideological politics as possible, and focus only on pragmatism. Make it our highest priority to find solutions to voters’ highest priorities (hint: right now its jobs and the economy). Look for common ground and work for common sense approaches.

Some Democrats may find that they do not have the capacity to unite around this strategy because it would require all elements of the party to become unconcerned that the Republicans could “win” on an issue, or that Democratic leaders would be guilty of “compromise” but it is certainly the posture that would be most welcomed by voters.

If there is a case for Obama changing by moving firmly to the left, now is the time to make it. We find what we have heard so far along these lines most unconvincing. Progressives have been issuing demands to lawmakers to support policies that they have not convinced a majority of voters to support. The challenge for the left is to make the case that it is possible to fight for the progressive agenda while listening to the public, convincing people that we care and are making solid and tangible progress on the issue that matters to them (jobs) so that we can win them back in 2012.

After two years where Democrats, holding nearly all the cards in Washington, spent a great deal of energy in disagreements with other Democrats, Republicans are about to show a demonstration of party unity and discipline. Democrats will never match the Republicans for discipline but if we are going to move the policies we care about, and to chart a path for a return in 2012, we are going to need greater focus and commitment on a few achievable goals. In the short term Republicans are rallying around the relatively small issue of earmark reform. We should match them with a clear focus on the extension of unemployment insurance and more bills to help small business.

And enough talk about how we should extend the Bush tax cuts. Democrats need their own tax plan, but that is the subject of our next post – oh look, Paul Waldman just wrote that one so we don’t have to.